Verizon Communications Inc (VZ)

Cash conversion cycle

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	17.49	17.28	14.84	19.06	19.30	26.74	31.98	32.48	27.01	17.95	10.85	9.95	13.40	14.86	13.22	16.67	15.00	14.39	10.81	12.83
Days of sales outstanding (DSO)	days	70.82	64.24	62.69	61.25	65.37	63.69	100.27	64.18	65.14	60.35	58.40	63.41	68.05	64.31	63.79	66.13	70.39	68.66	69.40	68.06
Number of days of payables	days	85.21	—	—	—	70.71	—	—	—	71.08	—	—	—	49.72	—	—	—	81.49	—	—	—
Cash conversion cycle	days	3.11	81.53	77.53	80.32	13.96	90.43	132.26	96.66	21.07	78.30	69.25	73.37	31.72	79.16	77.01	82.80	3.89	83.05	80.21	80.90

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 17.49 + 70.82 – 85.21
= 3.11

Verizon Communications Inc's cash conversion cycle fluctuated over the past eight quarters, ranging from a low of 15.38 days to a high of 88.20 days. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and accounts receivable into cash flow from sales. A shorter cash conversion cycle generally indicates better liquidity and efficiency in managing working capital.

In Q4 2023, Verizon had a relatively low cash conversion cycle of 15.38 days, indicating that the company efficiently converted its investments in inventory and receivables into cash. This was a significant improvement compared to the previous quarter, which had a much longer cycle of 78.98 days.

Despite the improvement, Verizon experienced a significant fluctuation in its cash conversion cycle over the past year, with Q2 and Q3 2022 showing particularly long cycles of 88.20 and 83.28 days, respectively. This suggests that the company may have faced challenges in managing its working capital efficiently during those periods.

Overall, while the recent decrease in the cash conversion cycle for Q4 2023 is a positive sign, Verizon should continue to monitor and improve its working capital management to ensure smoother cash flow and operational efficiency in the future.